Inventory falls again!
The inventory (stock) of pending listings was down 1.5% compared to one year ago. However, due to years of undersupply, the inventory (stock) of active listings trended even lower at 21.8% below the level one year ago. This indicates that the housing market is still suffering from under-supply and that house prices will continue to trend upwards although modestly compared to 2021. Most markets are experiencing a decline in new listings. In 138 of 188 metro areas tracked by NAR (73%), there were fewer home new home listings (flow) compared to one year ago.
Home Prices are Up.
Home Prices Appreciate at Slower Pace of 14% Existing-home sales prices continue to increase although at a slower pace than in 2021. The median sales price on existing-homes sold during the four weeks ended January 30 rose 13.6% year-over-year. In December, the median existing-home sales price increased 15.8% from one year ago to $358,000. In 128 out of 186 markets (70%), the median existing-home sales price rose at a double-digit pace. Official figures for 2021 Q4 will be released February 10. Some of the strongest price accelerations were in Reno (39%), Ocala (39%), Salt Lake City (36%), Punta Gorda (33%), North Point (32%), Phoenix (32%), and San Jose (31%).
NAR Chief Economist Lawrence Yun expects existing-home sales prices to rise at a slower pace of 5.1% in 2022 to $364,700 as demand eases due to higher mortgage rates and with nearly 80,000 more single-family housing starts than in 2021 to a level of 1.2 million.
Homes Selling Faster
Properties Typically Sold Faster Compared to One Year Ago With demand still outpacing supply, properties typically sold five days faster at 22 days compared to one year ago (27 days). Official figures for the month of January will be released on February 18. In 40% of 146 metro areas tracked by NAR, properties typically sold in 15 days or less during the four weeks ended January 30. Properties typically sold in less than one week in Colorado Springs, Durham, Burlington (North Carolina), Omaha, Fayetteville, Harrisonburg, Spokane, and Warner Robins.
Mortgage Home Purchase Applications Decreased Mortgage applications for a home purchase increased 4% from the prior week but decreased 6.72% from one year ago, according to the MBA Weekly Mortgage Applications Survey. Weekly mortgage applications were down in the past week, so this volatility indicates there is no clear trend that mortgage purchase applications are declining significantly due to higher mortgage rates that have increased to 3.55%. Conventional financing (includes Fannie Mae/Freddie Mac conforming loans) purchase applications increased 4.8% from the prior week while government-insured financing (FHA, VA, USDA) increased 1.3%. Even with mortgage rates rising, refinancing applications increased 18.4% from the prior week but decreased 50.4% from one year ago. Expect a decline in refinancing activity for the most part in 2022 due to rising mortgage rates and with most homebuyers likely to have already refinanced given the low mortgage rates in the past year.
If you are thinking of buying a home in San Diego in the next year, now is the time in order to beat rising interest rates and home price increases. Home sellers, there is a HUGE demand for you home. If you are thinking of selling, don’t hesitate!